Accountancy News

The forms P11D, which report employees and directors benefits in kind and expenses, are due for submission by 6 July 2008 for the year ended 5 April 2008. The process of tracking down the information can take some time so it is important that you don’t leave things until the last minute.

The Information and Consultation of Employees Regulations 2004 have been extended to cover undertakings with 50 or more employees from 6 April 2008.

After business leaders voiced their objections to the abolition of taper relief, the Chancellor introduced a new Entrepreneurs’ Relief (ER). ER may be available for disposals, reorganisations and relevant transactions taking place on or after 6 April 2008.

Since the start of the tax year the basic rate of income tax has been reduced from 22% to 20% and the starting rate of 10% abolished for income except for savings and dividend income.

The National Minimum Wage will rise to £5.73 (£5.52) an hour in October 2008.

In the Pre-Budget Report last October Chancellor Alistair Darling announced a series of changes to the capital gains tax (CGT) regime for individuals and trustees. These changes included the abolition of taper relief and indexation relief and the introduction of a single rate of CGT of 18%. The changes take effect from 6 April 2008.

For many years, there have been requirements for employers to verify the identity of their workers, to prevent illegal working. The legislation was backed up with fines.

The employers annual returns P35 and P14 (P60) are due for submission to HMRC by 19 May 2008. There is a tax free incentive payment due of £100 for small employers, those with less than 50 employees, who successfully file their returns electronically.

HMRC have issued some additional guidance on filing in year forms online. The guidance concerns online submission of forms P45 and P46.

Alistair Darling has delivered his first Budget as Chancellor of the Exchequer. His focus was very much on stability against a backdrop of economic slowdown and turbulence in the global financial budgets.

His 50-minute speech delivered few shocks as Mr Darling said the government would do everything in its power to keep Britain’s economy strong and inflation low, although there was “green” thread running through the Budget.

As many of you know Chris and I belong to an International organization called Integra International.

We attended the annual 2007 Integra conference in Hong Kong in November last year which was largely centred around the subject of doing business in China .

Since that time we have worked successfully with two Integra members in the early part of 2008.

Pictured from left to right - Chris, our host Simon Cheung & Mark.

One of our clients, QTAC Solutions Ltd, is starting to do business in China. They asked us if we knew anyone who could help with planning the next steps of this process. We put them in touch with Simon Cheung, the Integra member in Hong Kong and China. They have already had a very useful meeting with him in Hong Kong to discuss the way forward and are grateful for the contact. In February we were instructed by a Singaporean company to set up a UK company and payroll operation in both the UK and France. Whilst we were happy to undertake the UK work we liaised with Olivier Maurin, the Integra member in Paris and he has set up the French side of things. Needless to say our clients are very happy.

We look forward to doing more joint assignments during 2008!

Mark Hunter

For many years, there have been requirements for employers to verify the identity of their workers, to prevent illegal working. The legislation was backed up with fines.

In the January issue, we reported on controversial new rules proposed by the government on residence and domicile.

Normally, the payment or reimbursement of expenses or the provision of a benefit in kind is taxable on the employee. However, particularly with expenses, it may well be that the employee is entitled to tax relief personally on the same amount. In order to obtain the relief, the employee would have to write to HMRC or fill out a tax return.

HMRC have announced that they have started sending penalty notices where their records show that they have not received 2006/07 forms P35 and P14 (the employer’s annual return and end of year summary). Similar penalties are also being issued where 2006/07 form CIS36 (the contractor’s annual return) is outstanding.

The government has announced up to £37m of funding to prevent work place disputes unnecessarily going to employment tribunals. The measures are part of a package designed to simplify the dispute resolution system.

It will come as little surprise that, once again, an HMRC online system crashed an important time of year. This time it was the self assessment online service that was disrupted on 31 January 2008 and 1 February 2008.

The limits on payments and awards made to workers in certain employment rights cases rose from 1 February 2008.

HMRC have published a consultation document on payrolling benefits in kind. The idea is that payrolling benefits in kind would remove the need for employers to complete P11Ds.

Even if no PAYE/NICs or CIS deductions payments are due for a given month or quarter, businesses are still generally required to notify HMRC by way of a ‘nil’ return.

In the Pre-Budget Report in October 2007 the Chancellor, Alistair Darling, announced a series of changes to the capital gains tax (CGT) regime for individuals and trustees. These changes included the abolition of taper relief and indexation relief and the introduction of a single rate of CGT of 18%. The changes take effect from 6 April 2008.

From 15 December 2007, the Money Laundering Regulations 2007 require certain businesses to have systems in place to prevent money laundering and report suspicious transactions. These regulations replace the previous ones which have been in force since 2004.

HMRC are running a series of workshops on the online completion of end of year PAYE returns. You can use the link below to see when sessions are running in your area. 

On returning to work in the New Year, many will be reaching for the travel brochures to plan their next holiday getaway. Now would be a good time to ensure that your employees (or your own) holiday entitlement has been correctly calculated.  The minimum statutory holiday entitlement was raised from 20 days to 24 days per annum from 1 October 2007. This entitlement is inclusive of Bank Holidays. 

The proposed changes announced in the Pre-Budget Report to the capital gains tax (CGT) system are radical. Taper relief for CGT will be abolished for disposals on or after 6 April 2008. Other changes to the CGT system include introducing a flat rate of CGT of 18% and abolishing indexation, an allowance for inflation.

To reflect the increases in fuel prices, HMRC have issued new advisory fuel rates for company car drivers.  These take effect for all journeys undertaken from 1 January 2008 so employers wishing to use the new rates should advise affected employees and update any expense forms as soon as possible.

Chancellor Alistair Darling announced in his Pre-Budget speech a change to the way in which the inheritance tax (IHT) nil rate band of £300,000 can be used for married couples and civil partners.

You may well remember that the Arctic Systems case involved a husband and wife who owned a company 50/50 and, broadly, took the profits out by way of dividends, again 50/50. HMRC attempted to tax the dividends solely on the husband, as he was performing most of the work which generated the profits of the company.